It’s a common scenario: an American consumer goes deep into debt and starts getting calls from debt collectors. They call and say: “Mr. Jones, you pride yourself on paying your debt, don’t you? You’re not a loser, are you? How does it make you feel to take someone else’s money and not pay them back? Have any pride?”
New Number: 412.342.0992
The Fair Debt Collection Practices Act Draws A Line in the Sand
An Example: The Case of Diana Mey
Is there a line that debt collectors cannot cross? Just ask Diana Mey, of Wheeling, West Virginia. Even though she was debt-free, she received a very nasty (and inaccurate) voicemail from a debt collector. Here’s how ABC News described it:
Two years ago, a debt collector with a company called Reliant Financial Associates, or RFA, left a message implying that her house was in jeopardy if she didn’t pay a debt. The message stated:
“I’m calling in regards to a preliminary asset liability investigation. They are in the process of serving some court documents in regards to case 29369… They have some information now pending questions at the property,… Springdale Avenue, in Wheeling, West Virginia. It is in your best interests to contact the department. You are required to contact 866-764-9779.”
It is illegal for debt collectors to make empty threats about serving people with a lawsuit or seizing their home. And it was especially galling to Mey, who says she is debt-free.
“They threatened to take legal action against our property and it wasn’t even our debt,” Mey said.
But it didn’t stop there…
Mey wrote RFA a cease and desist letter, telling the company not to contact her anymore, and sent it certified mail. Postal records show exactly when RFA signed for it. Precisely 23 minutes later, Mey started getting mysterious hang-up calls that showed up on her caller ID as coming from her local county government.
“So I called the number back and it was the sheriff’s department. And I asked if someone there was trying to reach me. And they said, no – nobody there was trying to reach me,” Mey said.
After two days of hang-up calls from that sheriff’s department number, Mey picked up another one with that same caller ID. The man on the line repeatedly called her a vulgar name for the female anatomy. He described violent sexual acts he would like to subject her to and asked if she liked to be “gang banged.”
“I was so frightened. I felt violated, but then I realized, you know, I’m taping this call,.” Mey said. “I pulled myself together and I thought, I can get through this. Just keep on talking buddy because we’re gonna get plenty of your voice on tape.”
The verbal assault went on for nearly two minutes before the man hung up.
Did Ms. Mey feel sorry for herself and curl up on the couch with a pint of blue berry ice cream? Probably not. She was busy filing suit, evidently.
Yeah!
Last May, Mey sued RFA for harassment and illegal collection practices. In August, RFA’s lawyer failed to show up in court, so Mey testified unopposed. The judge called RFA’s actions “malicious” and ruled that all of the allegations were true. And then he awarded that record judgment of $10,860,000.
OK, so what’s the law? (This is a legal blog after all.)
The Fair Debt Collection Practices Act
Federal law prohibits such activity. The Fair Debt Collection Practices Act (“The Act“) precludes a debt collector (a third party collecting a debt) from making false, misleading, or threatening statements.
The Act Means Serious Business
It is as strict liability statute, meaning, the defendant’s intent is not relevant. It makes no difference whether the Defendant “meant” no harm. The Act goes even farther. Also punishable are statements made to the debtor’s attorney or other representative, according to the Third Circuit.
Ruling on an issue that has fractures the circuits across the USA, the 3rd U.S. Circuit Court of Appeals has ruled that lawyer-to-lawyer communications may be actionable under the Fair Debt Collection Practices Act, so long as the information conveyed is false, as Shannon P. Duffy has written in the The Legal Intelligencer on January 14, 2011.
“If an otherwise improper communication would escape FDCPA liability simply because that communication was directed to a consumer’s attorney, it would undermine the deterrent effect of strict liability,” opined U.S. Circuit Judge Dolores K. Sloviter in Allen v. LaSalle Bank.
In these cases, the plaintiff need not prove a pattern of conduct, either. Any single violation of the Act is punishable.
What is the Punishment?
The punishment includes sanctions, actual damages, and attorney fees, which can be substantial. Because this is federal law, suit can be filed in state or federal court.
You may not be so lucky as to have the other side fail to show up in court, but it’s OK. Most of these cases settle out of court, anyway, and you don’t have to go to court yourself, unless you want to (We like to, but not everyone craves time in court).
Of course, you want to bring suit against parties who are able to pay the amount of the judgment, ideally. As Ms. Mey would have quickly realized, there can be long walk from the courthouse to the bank, so to speak. There may be option for recovery, even if the defendant appears judgment proof. The individual owners of the company may be liable for their individual conduct. Or, you may pierce the corporate veil if the company had been undercapitalized, or where fraud existed.
Our Pittsburgh attorneys are happy to handle these kinds of cases and put the fear of the judicial system in the hearts of shady debt collectors who go too far.
2021 Update: Pennsylvania
Consumer Alert
On November 30, 2021, the first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) took effect. November 30, 2021 and the new “Regulation F” will likely have a significant impact on many Pennsylvanians.
Moreover, Pennsylvania has its own statute protecting consumers from unfair debt collection practices. This is called the Fair Credit Extension Uniformity Act, which took effect November 30, 2021 and holds debt collectors to those same rules and further extends the restrictions to creditors as well.
